Turn-offs
June 9th, 2007 by 
Amish Parashar
As I’ve said before, I consider myself very fortunate to be able to see many business proposals and plans and to able to help entrepreneurs build vibrant businesses from good ideas.
Today I had a chance to reflect on the many presentations I have evaluated over the past months. Instead of focusing on the overwhelmingly positive aspects of this work, and the incredible passion of the entrepreneurs, I thought it would be useful to share some common pitfalls:
1) Undervaluing the importance of THE TEAM — who is on board currently? Who do you need to get on your side? How will you recruit and retain them?
2) Overestimating the size of the ATTAINABLE (or ACHIEVABLE) market. This isn;t the same as the overall market. It doesn’t matter to me that the pet food market is over $10 Billion — I want to know how many of your software-controlled pet food dispensers you can realistically sell…not all pet owners, but those that are tech-savvy, not so rich as to have pet-sitters or use pet hotels, etc.
3) Stating an EXIT STRATEGY. We all know that companies a) get acquired b) become wildly successful through IPO or c) licensing out their technology to make tons of money. What has never been stated in a presentation I’ve seen are the most (statistically) likely outcomes, the company goes under or keeps operating successfully without a, b, or c happening. Since we know that a, b, and c exist, putting on a slide doesn’t provide new information — the most promising entrepreneurs hope to build a successful business for the near future and realize that plans will change, and the eventual outcome is beyond the scope of an initial plan.
4) 10X return on investment in 2 years (similar to breaking even in 2 months). Both are possible, just not likely. Don’t overstate your financials. The numbers should be realistic and represent both top-down and bottom-up approaches (that is from the achievable market size down to your product and from your product to sales forecasts).
5) Poor LISTENING . When its time for feedback, or Q&A, or networking after a presentation, pull out a pad and a pen, listen and take notes — very little else turns people off more than defensive presenters eager to prove that they are correct and you just don’t understand. While these may be true, this isn’t a good way to make a lasting impression.
Stay tuned for more learnings from our experiences building successful companies with passionate teams….
Posted in Entrepreneurial, Innovation, Solutions, Venture Capital | 